Can EMMA Give Obligors a Homepage?

The MSRB’s EMMA website celebrated its 10th year anniversary with an enhanced design and navigation, but the data continues to be grouped by issuers, making it difficult to search for hospitals and other conduit borrowers.

Correction: EMMA does display credit outlook/watch information when submitted by each rating agency. To view, go to the security details page for a given CUSIP and click the “Ratings” tab. Moody's does not provide outlook/watch information (5/15/2018).

The Municipal Securities Rulemaking Board (MSRB) EMMA website was launched in 2008 and has since become the central repository for municipal disclosure, providing quick and free access to official statements, audited financial statements, and various other continuing disclosure information.

EMMA has made the municipal debt markets more transparent, but the website still has a few shortcomings.

Bond ratings from Fitch, Standard & Poor’s, Moody’s and Kroll are now reported for all rated bond issues, but for some unknown reason, rating outlooks are still nowhere to be found. To get outlooks, visitors must make another stop on each rating agency’s website. The Fitch and Moody’s websites allow keyword searches by obligor name, which speeds up the process, but S&P’s only allows searching by issuer name. Rating agencies must have pushed back on sharing ratings because printing the EMMA issue detail page hides ratings with a stern warning that "ratings information cannot be printed". Pundits speculate a new MSRB rule is on the way to mandate the removal of the Print Screen key from all keyboards and close that loophole.

Secondary trading prices have been reported on EMMA since its inception, but are shown unadjusted for changes in underlying rates. This can confuse some visitors into thinking a bond price is changing due to changes in the borrower’s credit picture, when it actually be due to changes in interest rates (when rates go down, bond prices go up, and vice versa).

Last year, EMMA added yield curves for three municipal indexes: Bloomberg BVAL AAA, S&P Municipal Bond Index, and MBIS Municipal Bond Index. Conspicuous by its absence is the Thomson Reuters Municipal Market Data (MMD) index. This is too bad because MMD is the index most widely used by underwriters to price tax exempt bonds. As a workaround, BVAL tracks MMD relatively closely, so it may be used as a substitute.

Setting aside these few deficiencies, the bigger challenge with EMMA is that information is grouped by issuer, not by obligor. This matters in the hospital sector where most not for profit hospitals are not issuers: they are conduit borrowers that go through a state, county or city to issue tax exempt bonds. Searching EMMA for an obligor’s name will return a list of issues, each with an “issuer homepage” button which shows all bonds issued by that issuer, but there is no such button for bonds issued by an obligor. As a result, EMMA visitors are on their own to assemble that list from search results.

The lack of grouping by obligor presents another challenge for hospitals with similar, generic names that will show up in search results meant for another hospital. For example, a search for “Baptist” returns over 600 issues. For “Memorial”, EMMA returns over 2,000 issues. An advanced search adding “Health” as criteria under Purpose/Sector narrows it down some, and so does providing a state, but searches for generic names can still return dozens or hundreds of records to sift through.

In addition to making searches on EMMA less laborious, introducing some type of obligor homepage would help obligors improve disclosure by providing bondholders and other interested parties with a single link to all of their information.